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13 January, 22:08

Last year Builtrite had retained earnings of $140,000. This year, Builtrite had true net profits after taxes of $65,000 which includes common stock dividends received of $10,000, and also paid a preferred dividend of $35,000. What is Builtrite's new level of retained earnings? A) $180,000 B) $190,000 C) $200,000 D) $170,000

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  1. 14 January, 00:05
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    Answer: $160,000

    Explanation: Retained earnings can be defined as the amount pf earnings left with the company after taking into consideration all tyoes of dividends and taxes.

    formula : -

    Retained earnings = previous retained earnings + net income - dividends to equity holders - dividends to preference holders

    thus,

    Retained earnings = $140,000 + $65,000 - $10,000 - $35,000

    = $160,000
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